197: Scale Your Business Your Way with John St. Pierre

13
Feb

John St. Pierre the co-founder and chairman of Brand Point Services and multi-site facility maintenance and remodeling contractor. He’s also the author of the $100 Million Journey and the co-host of the Entrepreneurs United podcast. We discuss about how to align company core values with personal ones, the Build Your Ideal Business Framework and the seven principles for entrepreneurial success.

 

—

Listen to the podcast here

 

Scale Your Business Your Way with John St. Pierre

Our guest is John St. Pierre, who is the co-founder and chairman of Brand Point Services and multi-site facility maintenance and remodeling contractor. He’s also the author of the $100 Million Journey and the co-host of the Entrepreneurs United podcast. John, welcome to the show.

Thanks for having me, Steve. Excited for the conversation.

So let’s jump in the middle because I think your new book, The $100 Million Journey is actually based on your real life experience. So tell me in a nutshell about your journey, your actual journey, the book, and how you got here, where you are.

Okay, sounds good. Yeah, let’s jump right in. You know, the journey of an entrepreneur, as you know, Steve, is not always a straight line up. And my journey has been filled with failures and successes. And specifically a few years ago, I guess 20 years ago, I started two companies. One was a hobby sports business and the other one was a project management construction company.

And I started growing both companies slowly as a startup businesses would be. And the sports company started taking off. And so I was really excited about growing that business. And I had a vision of growing that to be a hundred million dollar sports company, global sports company. And it started running really, really hard. We grew it to north of $50 million. And after 15 years of building that company, I got fired from the very company that I co-founded and lost absolutely everything.

And I picked myself up off the pavement and tried to introspectively have, look at what had happened, what were my contributions to this particular situation? How did I make myself so vulnerable and the company so vulnerable? And diagnosed that into the learnings and principles that I now have in my current journey. And I applied those principles to the construction company that was kind of sitting over here, growing slowly and nicely and had good management team, but it was taking a slower approach to growth.

And I applied those principles to that business and we successfully drew that company 505% over the past three years to north of a hundred million, but I did it the right way and applied the principles a lot differently than I did the first time in a massive failure. So that’s basically the, in a nutshell, my a hundred million dollar journey.

That’s very interesting. I just had this conversation yesterday with my son that really, you know, success is all about failure really, because you have to fail to figure things out. And particularly when you want to differentiate your business, you have to fail so that you are forced to come up with new solutions. And then you can apply that to another business in your case, and then you can get the success.

But first you have to be willing to fail. You have to put yourself in danger, so to say, and take the risk of, you know, that’s entrepreneurship is all about, this courage or whatever, resilience. So let’s dig a little bit deeper, because now you went through that very bruising experience, and then you developed some concept which helped you with BrandPoint services to grow that business.

So I’d like us to talk a little bit more about that, but there’s particularly one area where I’d like us to drill down, which is core values. And there’s a lot of confusion between personal core values, company core values. There are even within company core values, there is kind of what I call corporate aspirations and behaviors that individuals exhibit. So tell me a little bit about how the business core values evolve and do you feel like they evolve out of the founders personal values or do they evolve in some other way?

I think a lot of times entrepreneurs, when they start their companies, you know, they just start running, they’re in startup mode, their heads are down and they’re plugging away and they’re trying to create something, trying to create the business that they had envisioned. And way too often they think through what their personal values are and what the company’s values are almost secondarily.

And I think one of the biggest mistakes I made, Steve, is in this massive failure that I had, I woke up at the end of this failure, during this failure, I should say, and you’re right, failure is a prerequisite for success, but it really sucks when you’re in the middle of it. It really stinks. But you have to have perspective and you have to have introspection. And as I was introspectively thinking through what had just happened, I realized that I was growing for gross sake. I didn’t actually know what I wanted to accomplish in life, let alone aligning that with the business.

Failure is a prerequisite for success. Click To Tweet

And so when I took a step back, it was really like, what do I want to achieve as an entrepreneur? What are my core values as a person? What do I truly believe in? And how can I align that with my business’s purpose and vision and core values? And aligning those are really, really important. I’ve been involved in a few businesses, and maybe you’ve seen them as well, where you have these posters on the wall. It’s proverbial. Oh, these are our core values, but the owner doesn’t even demonstrate them. And there’s a complete misalignment.

And then what happens is the speed of trust happens, Steve. The people in the organization look at the founder and they look at the core values and they’re like, these aren’t even aligned. This person isn’t even who they say they are on the wall. And so I think it’s critically important that your personal core values align to your business’s core values. And it doesn’t matter what they are. And you mentioned something really, really important there, Steve. It’s not just what the words are, it’s what are the behaviors.

It's critically important that your personal core values align to your business's core values. Click To Tweet

I think it’s really, really important for the organizations to align. Okay, if this is our core value, what are the three or four behaviors that demonstrate this core value? And or what are three or four behaviors that do not demonstrate this core value? So when we see it, we can immediately identify that is not who we are. And so once you have those aligned as a person and as a business, you can really achieve the success you’re looking for, or at least feel fulfilled in what you’re doing every single day.

So then ideally, the founders would want to build a business around their personal values that they care about, right? And then the business will actually reflect the values of the founders. Because if it doesn’t reflect them, the founders are gonna be misaligned and that’s not gonna help the business too much.

I mean, if the founders misaligned to the core values of their own company, they lose the trust of their team instantly. You know, the speed of trust by Stephen Covey, that book, right, when trust is high, the speed to do things goes up, cost goes down, you’re very efficient and you’re flowing. But when trust is down, well, the inefficiencies that you see in your business aren’t very good, the turnover of your staff isn’t very good.

You need to have that alignment. And sometimes though, I’m sure you’ve experienced this as well, the core values that an entrepreneur can potentially change by the team they surround themselves with. They can also get influenced and go, you know what, maybe my core values aren’t really where I want them to be. And they can shift and move as they go along along with their teams, but it needs to be genuine.

When trust is high, the speed to do things goes up, cost goes down, you're very efficient and you're flowing. Click To Tweet

So let’s go from here, from this idea of the core values, is kind of a bigger idea, which is how do you align the business with your own personal desires and your own personal life plan, so to say. And we discussed this framework that you created, I think we called it the Build Your Ideal Business Framework. Can you explain what is the process of how one goes about that?

Yeah, well, I guess first off, what percentage of entrepreneurs do you think have an actual life plan for themselves? And I know I didn’t. What would you say?

Probably 15, 20%.

Yeah, and I’d say probably 10. So we’re close. We’re in the same ballpark, right? So 90% of entrepreneurs are meeting with their strategic business plan and their teams and go, okay, what do we want to accomplish as a business? What is our vision? How big are we going to be? You know, what’s our big, hairy, audacious goals? But yet 90% of them don’t even have a plan for themselves.

And so what ends up happening is they’re running a hundred miles an hour on their business, but they’re overstressed, overworked, not spending enough time with their family, not eating healthy, not taking care of their bodies. They’re just completely misaligned with their life. And so what I determined after this failure is, wait a minute, the tail’s wagging the dog here. I gotta stop this nonsense, and I got to align who do I wanna be as a person?

What am I ultimately trying to achieve personally in all these different segments of my life? And now how can I align my business and what I want to do in that business with that purpose of my life? And once you align those two, you’re able to achieve some pretty awesome things because no longer are you at the victim of whatever the business is going to do, whatever the business is going to grow.

You pump the brakes a little bit and you say, hold on a second, this is what I want in my life. Now I’m going to go achieve that by having this business instrument that assists me with that. So the alignment of those two, I think is very critical and way too few entrepreneurs actually have that alignment.

Yeah. And I like to think that if you have figured out a business that works, that is, I call it a buyable business that essentially, you know, that you have a formula for making money. It may not be very profitable, but you figured out how to make it work and how to keep it going. Then you have potentially an asset that can, a vehicle that can take you to your ideal life.

And then it’s just all about figuring out how to make this business work well so that, and figure out where you want to go with it, and then you can get there. Okay, so let’s say your first step is you come up with your life plan. I think you called it the True North life plan. So what does that look like? What is your True North life plan anyway?

I borrowed principles from a whole bunch of different people. You know, the one thing, the book, The One Thing with Gary Keller. I borrowed principles from Simon Sinek, Start With Why. I borrowed a whole bunch of different principles. But really it starts with, I have a one pager, Steve, that tells me in the next 30 years, what am I ultimately trying to accomplish in my life? What is that ultimate thing I’m trying to accomplish? And then I break it down by segment.

What am I trying to accomplish with my career, with my wealth, with my health, with my family, with my relationships, spirituality? I have five or six different segments. And I try and say, okay, in the next 30 years, let me envision what does that look like for me? And then I work it down to, okay, well, if that’s where I want to be in 30 years, where do I need to be in 10 years in these different segments?

Where do I need to be in three years in these different segments? Where do I need to be in one year in these different segments? Okay, now I’ve got a one-year plan. Now, where do I need to be each quarter? And I align 90-day plans to that year plan. And so if I achieve my 90-day objectives, that’s guiding me towards that one year plan. And so I kind of back it all the way through and make sure that everything’s aligned along the way as I go.

I mean, that’s very impressive. If you can do that, that takes some discipline, because essentially, you now have not just one thing, maybe you have one thing in your business, and then you have one thing in your health, one thing in your wealth creation, one thing in your relationship, and then you have to keep all those balls in the air, and then you have the fires that are kind of unavoidable. So it’s very impressive. So, OK, so you’ve got your life plan, your 30-year plan, your rigorous engineer, you’ve got your one year, your quarterly. Now, how do you the next step is aligning your business with those goals. So how does that happen?

Yeah, I’ll say this, Steve, you know, what I used to do is I used to meet with my management team once a year, typically around Q4, the fourth quarter, and we’d sit down around the room for a full day. And we would strategize where we want to go with this business in the short term and the long term. But I never used to do that for myself. And I think that’s the key to developing your two-month life plan is when you’re sitting down with yourself and really going through deep thought of what you ultimately want to achieve in life.

And you mentioned a comment there a second ago about, how do you achieve all these different one things and all these different segments? And I think the biggest thing is be present. When it’s time to go be healthy, eat healthy. When it’s time to go work out, work out. When it’s time to be with your family, be with your family. When it’s time to work on your career, do what you’re supposed to be doing.

And right now, I’m doing exactly what I need to be doing with you that aligns to my plan, right? So always spend every time of your day aligning to what that True North plan is. But when you meet with your company and you’re designing your strategic business plan, you got to keep that in mind. What were those components of your True North life plan you were trying to accomplish?

And an example of what that means to me, Steve, just a small example, if your goal is to achieve wealth and freedom through running a business, well, one of the things you need to do is build a culture of entrepreneurship within your organization and develop talent and train talent to sometimes take over your role someday. And so if you have that mindset, you’re gonna treat the people in your business a little bit differently.

If your goal is to achieve wealth and freedom through running a business, you need to do is build a culture of entrepreneurship within your organization and develop talent and train talent to sometimes take over your role someday. Click To Tweet

You’re gonna mentor them a little bit differently. You’re gonna bring them along a little bit differently versus feeling like you’ve gotta be the chief cook and bottle washer every day running your business, trying to get your business to success, where you’re not developing the talent that someday can take over this business asset for you as an example. So that’s just one small example. If you can align those two, you start thinking a little bit differently about how to build your strategic business plan.

Essentially, this is all about being a long-term thinker and having your day-to-day decisions be driven by the long-term objectives that you have, which is what is the most difficult to do because we always have our challenges that are right in front of us. And, you know, our lizard brain will force us to deal with that and try to fix the here and now and not be driven by the long-term. But I love that.

So, basically, you’ve got a life plan, you broke it down, then you have a business plan, you kind of synchronise the two, how are they going to be aligned and what do you need to do in your business so that it supports your long-term life plan. So these are like the three steps. The fourth step is this process is kind of the richest one, which is the seven principles that you developed and which your book is all about, I believe. So tell me a little bit about the seven principles and how you develop them and how they are designed to help an entrepreneur.

There are seven principles that I found for entrepreneurial success. And if you miss one of them, it can just derail the whole process. You need to have patient ambition, but I’ll rattle them off. Principle one, protect and grow your equity. Principle two, you need to build your own capital. So if you don’t build your own capital, you’re gonna have to go get investors or bank debt. That potentially could affect principle one, protect your equity.

Principle three, reinvest smartly, patiently and smartly into your business. Double down on your windows, focus, try and scale your business, build operational capacity. Because if you do that right, you’ll build more capital, principle two, and you’ll further protect your equity. But if you don’t, it can flow downhill. Principle four, build a culture of entrepreneurship. Build a culture where people in your business treat the business as if it’s their own, because someday they should probably run your business.

Principle five, protect the house. If you don’t protect the different elements of the business, everything could fall apart. Principle six, how to access owner’s liquidity. How to access the liquidity that’s on balance sheet of the business and move it to your personal balance sheet in tax efficient manners. And principle seven, how do you ultimately move from CEO to chairperson?

Because you may not be the best person to run your business, but also if you’re trying to build a profitable business asset that can generate passive income for you and your family and your business, you have to be able to move to be more strategic chairperson of the business versus putting out the fires every day like we talk about.

And I see that you did that with Brandpoint Services on your LinkedIn profile, you’re the chairman. So you are at the strategic level, you’re not sucked into the day-to-day, which is awesome. So there’s a couple of these principles that really intrigue me. It’s number two, build capital. So how does one build capital in the business and essentially make sure that the business is not just treading water, but it is creating, you don’t need outside investors. I think that’s probably one thing that you learn that outside investors can grab control of your business. So how do you make sure the business is building capital inside it?

Here’s a little secret that I found out that I wish I had learned a lot earlier. You know, 99 out of 100 entrepreneurs measure their monthly performance based on a profit and loss statement. You know, if there’s 100 people in the room, I say, who manages based on profit and loss? 99 hands would go up. But that’s like reading the first chapter of a murder mystery novel and thinking you know how it’s gonna end. It actually doesn’t tell you the true picture.

And then if you advance a little bit further, a lot more sophisticated entrepreneurs may look at their balance sheet and they may look at their balance sheet to kind of see where they are. But the one tool that I found out, and I learned this from Alan Miltz, he’s the co-author of the cash chapter in Vern Harness’s book, Scaling Up.

And I had a conversation with him. He’s like, look, I’ve interviewed 3000 CEOs and not one of them can tell me how to properly calculate their net operating cash flow. But cash is king, revenue is vanity, profit is sanity, cash is king and queen. You need to win at the business of making cash because as you can make cash, that influences how fast your company can afford to grow. And one of the most influential articles I read was a Harvard Business Review, and the title is, how fast can your company afford to grow?

You need to win at the business of making cash because as you can make cash, that influences how fast your company can afford to grow. Click To Tweet

Well, Steve, this was eyeopening for me because in the sports company I talked about earlier, I was trying to grow 50, 100% a year. With that, we were going so hard. But our self-financeable growth rate, which you can actually calculate, was probably around 5%. So I’m trying to grow 50%. Our self-financeable growth rate is 5%. Well, guess what? There’s a delta and gap. I didn’t have enough cash to grow. So guess what was going on?

We were, our loans at the bank were going up. I was trying to get investor capital. That was all diluting my equity. Everything was kind of falling apart. We were, we were almost a victim of our growth, our own success. We could grow that fast. We just couldn’t afford to grow that fast. And therefore, we diluted our equity, we lost control of the business and made ourselves vulnerable. So you need to win at the game of building your own cashflow in order to build a strong, sustainable business.

So it’s very interesting, this topic and how you explained it. And a couple of things came to mind. One was that, one of the things that I look at this is, and obviously I understand profit versus cash flow. But in terms of profit, if you are not generating, if your business is not profitable at the elite level in your industry, then you’re bound to fall behind your competitors and have to go out to investors, then you lose control, or you just grow at the lower clip, and then they will be the first, you’ll take the first mover’s advantage and take the bomb. So that’s one thing. The second thing is the cash. How do you turn the profit into cash and make sure that you’re not building working capital that is useless and is essentially draining the value in the business? And the third thing, I think, which is similar to this growth rate, this self-financed growth rate, is talent. So do you find that there’s also a limitation to your growth by the number of talented people that you can attract and inculcate in your business?

Yeah, absolutely. Which is principle number four, build the culture of entrepreneurship. How are you bringing talent into your business? Because ultimately, if you don’t have that talent, that’s going to step up in leadership roles of your company, you’re going to end up doing it all. And you can only grow as fast as your talent, to your point. Certainly you need the cash to be able to afford the talent. And what ends up happening, Steve, is a lot of entrepreneurs do not make those bold moves to hire A-level talent. They hire the C or D level talent because they don’t have the cash to do it.

They don’t have the cash to bring A players into their business. So if you build your own capital properly, you can principle three reinvest that smartly into building a culture of entrepreneurship and bring A talent to your business. There’s no way that I’d be able to be the chairman of my company as an example, if I didn’t have A players in the full leadership team of that business. It’s essential. Otherwise I’d be back in the trenches running the business myself. So you have to be able to afford it, but absolutely, you’re always a limitation. You’re only as strong as your weakest link.

That is cool. So, okay, so you make sure that you build the capital, you focus on turning your profit into cash, you reinvest it smartly. What does it mean, reinvest smartly?

So when we were growing real fast, I was, you know, hey, we’re doing successful over here in this business line. Let’s start a manufacturing facility over here. That’s, that sounds like a good idea. So we were reinvesting our capital that we were building into areas that consumed a ton of cashflow, which then reduced our net operating cashflow, reduced our self-financeable growth rate, as opposed to doubling down on our winners, right?

So we didn’t have negation ambition. We weren’t scaling appropriately. We were reinvesting wide across, right? We were opening new business segments. We were making mergers and acquisitions. We were investing carelessly the net operating cashflow we were generating. And I think one of the terms that I found after this big failure that really still resonates with me today, Steve, is entrepreneurs need to have patient ambition.

Entrepreneurs are not a patient bunch. We’re a chase the shiny object syndrome, you know, a bunch of entrepreneurs, right? Oh, let’s go over here. Oh, let’s go over here. But the problem is if you are not reinvesting to grow your net operating cashflow, and therefore you’re not reinvesting to increase your self-financeable growth rate, you’re gonna actually be burning cash.

And when I think about the hundreds of thousands of dollars of management influenced waste, where you make a decision to go somewhere it doesn’t work and there’s $100,000 down the drain, or you get this new technology system and that was a failure, oh man, that was a big mistake. We gotta have more patience and grow our businesses more systematically by reinvesting smartly.

Yeah, patience is such an interesting virtue. So what I have found was that the older I get, the more patient I get, which makes absolutely no sense because I have less time, right? So how can I be more patient?

Yeah, you’re wiser.

But it is this idea of, you know, the patient in the hospital is basically a person who is willing to suffer, you know, they’re willing to stay with the suffering. That’s that’s what patients I think that’s what the Latin word means and and that it is actually an active behavior. It’s not a passive thing It’s not like okay. I’m patient. I’m not doing anything. No, I am doing it. I am I how you said it patient ambition. I’ve got this ambition is burning ambition, but I know that I can’t you know Be as Roman a day. So I am going through the pain of suffering of not being able to go faster because it’s just counterproductive. I love it. That’s awesome. So we covered reinvesting smartly. How is Protect the House different from reinvesting smartly?

I think Protect the House, Steve, is, you know, a lot of you mentioned it earlier, a lot of times entrepreneurs are working really hard in their business, but yet they meet with mentors and advisors like you and I, and we’re like, you got to work on your business. You got to rise above your business, work strategically. And they’re like, their hair’s on fire. They’re like, I don’t have time to do this. But what ends up happening is, you know, being an entrepreneur is like a game of whack-a-mole.

You hit one, two, three, and then four, five, six pop up, and you’re always like kind of going around, right? Or, you know, imagine a boat with a hundred holes. You’ve plugged 99 of them. Well, where’s the water going to come through? It’s going to come through that 99th hole, right? So are your HR processes tight? Are your cash controls tight? Like a couple of examples, Steve, like, you know, we got caught with a wire fraud situation. My controller received an email that looked like it was from me. It wasn’t from me.

The email address had a letter that was wrong, but it was instructions to wire $250,000 to China. And we were a global business. So that kind of made sense to her at the time. Oh, we have this event, I got to send this money. Wire’s the money. Well, guess what? We didn’t have dual authentication controls. We didn’t have all these different financial controls or HR processes controls. If you don’t have controls in your business, you’re going to be exposed. You’re going to be vulnerable. So how are you protecting all of these? Are you doing vulnerability assessments on your business?

I mean, what percentage of entrepreneurs sit down on an annual basis and assess all the vulnerabilities in their business? They don’t have time. They’re working so hard in the business, they don’t have time to strategically look at it. So if you don’t protect the house, you could do principles one through four excellently. Just kill it. Have one situation, one lawsuit, one bad debt of a customer, one situation that happens that could really kill your business. And you just got to really work to protect your business at all times.

That’s fascinating. Well, these are all great principles. We didn’t have time to cover all of them, but I bet the other ones are equally rich in content and in insights. So definitely I recommend you go and check out the 100 Million Journey, which by the time we publish this, it’s going to be out. Probably it will be on the bestseller list as well. I’m definitely going to preorder it. So, John, if people would like to learn more and maybe connect with you, where should they go?

Yeah, absolutely. Like you mentioned, if you want to go to Amazon, the $100 Million Journey is available there. You can also go to 100mjourney.com. Along with the book, Steve, we have an actual workbook with all these templates and worksheets. I talked about the Calculate Yourself Finance and Growth Rate, all the different tools we talked about in this, your True North Life Plan, your Strategic Business Plan, all the tools that I use, I put in there as well. That comes completely free, you know, to get with the book along with the book as a carry forward. So please go get that. And you can follow me anywhere on social media at JohnStPierre100.

That’s amazing. Very rich episode in content. I think it’s going to take me some time to absorb everything that you’re teaching. So thanks, John, for coming on the show. And for those of you listening, we get more and more amazing entrepreneurs on the show. So make sure you are subscribing on our YouTube channel. You are following us on LinkedIn, where we publish short forms of all these videos as well. The Steve Preda Business Growth LinkedIn page. And stay tuned because next week we’ll have another great episode. And stay tuned because next week we’ll have another great episode. Thank you, John, for coming.

 

Important Links:

 

This entry was posted in . Bookmark the permalink.